Determined not to jeopardise the first budget surplus in 12 years, Josh Frydenberg remains disinclined to heed the RBA's advice to loosen the government's purse strings as a means of stimulating growth. The tension is “Australia's big economic dilemma”.

The Liberal Party's most senior figures are watching nervously ahead of Sunday's Victorian Senate preselection race to replace Mitch Fifield as it descends into a battle between split factions and personality cults.

Prime Minister Scott Morrison has effectively killed off the prospect of fast-tracking any more major projects to help stimulate the economy which is at its lowest ebb since the global financial crisis.

The Morrison government is resisting calls from business to bring forward tax incentives that would lift a dangerous decline in business investment, relying instead on cuts to income tax and interest rate cuts.

Treasurer Josh Frydenberg has downplayed the significance of slowing economic growth, saying today's numbers did not reflect the Morrison government's tax cuts or the full impact of recent reductions to interest rates by the Reserve Bank.

Treasurer Josh Frydenberg concedes the nation's economic growth for last financial year will be poor but believes activity will pick up in the September quarter because of cuts to income taxes and interest rates.

A business cash flow tax offering an immediate full deduction for corporate expenditure should be pursued by Treasurer Josh Frydenberg to create a "powerful" incentive to invest and protect the economy against recession, says economist Ross Garnaut.